All Forum Posts by: Will Barnard

Matt,

I am not a fan of the Go zone and I have had many investors and sellers/developers, bring me the numbers on their projects claiming cash flow. None of which TRULEY had any. This is not to say that you are not or anyone else is not.

I do have a CPA I could refer to you who is very knowledgable in RE throughout the country. He is also a tax attorney and author. Perhaps we shoul speak directly on creating some type of synergy or mutually beneficial relationship in RE. Feel free to contact me directly via email or phone, both of which can be found on my profile and my website.

Will

While Jason's answer may work for inexperienced sellers, you will find that a savy seller will require an EMD greater than $100. I would never accept a purchase contract that was assignable or not, with only having $100 as "skin in the game" for the buyer.

Of course, as the buyer, offer as little as possible, when applicable. In order for a contract to be official, in most states, you must place some amount of financial consideration.

Go zone CPA's?
The go zone comprises of multiple states. You should have a CPA and tax attorney in the state in which you plan to invest.

Also, what has brought you to the go zone? Properies in these areas are very difficult to cash flow, the economy is poor, and regardless of what the seller/ presenter has told you, all the go zone "benefits" may or may not benefit YOU.

I agree with Jon, in that the commercial loan frees up your personal credit for additional acquisitions.

However, to answer your question, it really depends on your strategy and needs right now. Do you expect to have good future appreciation in the units you have and are buying? Do you want them mostly for cash flow? What part of OH? If the answer is for cash flow, then you are actually reducing your monthly cash flow by obtaining the new acquisition, judging from the numbers you posted.

Perhaps if you laid out your current & future strategies for us, we could be better informed to give our opinions for you.

John,
Welcome to BP.
Many of us, including myself, would be interested in hearing more about your availability to REITS and other private capital.
Please elaborate as Josh requested so we can have a bit more info about you and what you have to offer.
Thank you.

Cap gains tax applies to both income and owner occupied properties, of course, currently, you do not pay cap gains on your personal residence up to a certain amount depending on your filing status, which will be changing as of Jan 1, 2009. Read my blog here on BP for the article.

McCain wants to reduce long term cap gains from 15% to 5% and Obama wants to increase cap gains tax. Guess we have to wait and see!

Yes,
Properties sold by REDC are free and clear of any liens or uncumbrances.
They also pay for the title insurance policy.

Mathew, you would be correct that these are not the nicest of neighborhoods. Not to "knock" Tom's business, but bying in the lower end areas will produce low future appreciation. These units are for cash flow only, and the management, tenant turnover and upkeep are high maintenance and require hands on. Very difficult to do from out of state in my opinion.

I think you have already been swayed by the other posters away from this investment (which is good advise), but to add another negative to look out for in other units is the fact that it is in a bad neighborhood. Regardless if the particular complex is nice, poor neighborhoods will receive poor appreciation over the years. Cash flow is good, but building wealth is created from appreciation.

Welcome to BP. If you decide to invest across the country (which is a valid & profitable strategy), make sure you acquire the knowledge of how to build your team and complete your due diligence. Those two items are of vital importance for investing out of state.